Prices of steel and iron ore in China were little changed in early trade on Friday with no clear direction, as market participants remained edgy about the outcome of U.S.-China trade talks.
Uncertainty hangs over the demand outlook for ferrous metals in top consumer China amid concerns about softer domestic demand and a trade war with the United States.
The most-active rebar contract on the Shanghai Futures Exchange edged up 0.3 percent to 3,787 yuan a tonne. Hot rolled coil was 0.2 percent lower at 3,724 yuan.
“We think that although a trade deal looks quite likely, the final product may not be as robust as the markets are expecting,” said analyst Edward Meir of INTL FCStone Financial.
“Metals in particular also have to grapple with figuring out which direction China’s government wants to take the economy,” he said.
The most traded iron ore contract, with May expiry, on the Dalian Commodity Exchange, was steady at 616.5 yuan ($91.68) a tonne by 0206 GMT.
However, other steel-making raw materials were lower, with coking coal down 1.9 percent at 2,035 yuan a tonne while coke fell 1.4 percent to 1,253 yuan.
“The market has become jittery again while waiting for the conclusion of the trade talks,” said analyst Helen Lau of Argonaut Securities.
“Some of the gains that we’ve seen this year were driven by progress in the trade talks but there’s still uncertainty there, so now we’re seeing some profit-taking,” she said.
Source: Reuters (Reporting by Enrico dela Cruz; editing by Richard Pullin)